Headlines
The curve rallies to policy — but the factory floor idles on gas.
Food's Share of Spending Rises as Income Falls
An IMF chart, built on USDA data, plots food spending as a share of GDP against food's share of total consumer spending. Poorer economies sit further up and further right on both scales.
- ▸Advanced economies hold the bottom-left corner. Food takes roughly 5 to 22 percent of consumer spending in that group, on food outlays worth under about 13 percent of GDP.
- ▸Emerging markets spread across the whole middle of the chart. Their markers run from about 11 percent of consumer spending to above 40 percent, and the group overlaps the advanced cluster at one end and the low-income band at the other.
- ▸Low-income developing countries occupy the top-right. Every marker in that group sits above roughly 29 percent of consumer spending, and the highest of them approach 55 percent.
A household that already spends half its money on food has no cheaper category to move into, so a price rise comes out of everything else it buys. The IMF places Bangladesh in the low-income group at the upper right of this chart. Food and beverages carry the largest single weight in the Bangladesh CPI basket, which is the same fact seen from the other side.
Food inflation belongs in the credit process, not only in the macro commentary. A price move reaches disposable income before it reaches any borrower's file, and the thinnest-buffer books — retail, microfinance-linked exposure, small-ticket SME — feel it first. A risk team reading food prices only off the monthly CPI print is working from the slowest signal available.
Policy & Rates (Bangladesh Bank)
Call money back at 9.48% — July's belly tightness has fully unwound.
FX Reserves
WATCH
- ◆Whether O/N and 14-day call hold at/below 9.50% or month-end demand rebuilds the belly premium
- ◆The next reserves print refreshing the 1 Jun $37.58bn read, now 64 days old
- ◆Deposit-rate pass-through as the July yields-dive flows into term funding
RISK
- ▼The 7-day's 11.95% dislocation spreading if a single lender's funding gap widens
- ▼A real policy rate near 0.34% on the June read thinning the taka's carry cushion after the 30 July cut
- ▼Rate relief arriving into dead credit demand — private growth at 4.98% — so the cut fails to transmit to lending
Banking
Q1 book frozen at 32.26% NPL; the credit impulse just fell to 4.98%.
WATCH
- ◆Whether Q2 2026 statements finally land the court-stayed loan overhang on BSEC's quarterly clock
- ◆Any Q2 CAR disclosure superseding the 1.56% Q3 2025 read
- ◆SME credit access as the SME Foundation flags 77% of CMSME entrepreneurs shut out of bank loans
RISK
- ▼The credit impulse dead at 4.98% private growth — the weakest sheets cannot out-grow their NPL stock
- ▼Gas-driven factory closures pushing fresh RMG-sector delinquency into the next NPL print
- ▼The court-stayed loan stock understating the printed 32.26% NPL ratio
The banking book is frozen on last quarter's prints while the new pressure arrives through the real economy. NPLs hold 32.26% on the Q1 2026 read and system CAR sits at 1.56% on the Q3 2025 figure — 844bp below the 10% floor, a cushion absent, not thin. The live signal is demand, not capital: private-sector credit growth just printed 4.98%, down from 6.03%, so even the banks that could lend face a shrinking book to grow into. Layer the energy shock — gas-driven factory closures and a 0.9% YoY July export dip — onto RMG-linked exposure, and the next delinquency wave is a supply story, not a policy one. The rate relief is real, with call money back at 9.48%, but useless here: cheaper funding cannot repair a sheet that has no borrowers. Dispersion stays the trade — own the private compounders that can carry a lean quarter, fade the state-owned commercial bank (SCB) scrip that cannot.
FX & External
Taka steady at 123.82; July exports dipped 0.9% YoY off a 12-month high.
External Flow Balance
Trade gap held $1.77bn — exports $4.03bn, remittance $2.82bn — while USD/BDT steadied at 123.82 for a second print.
USD/BDT broke its fourteen-print 122.85 hold to 123.82, steady there a second print; reserves $37.58bn on the 30 Jun read.
Treasury: the peg is settling at 123.82, not sliding — watch reserves and the export trend for the next leg.
WATCH
- ◆Whether 123.82 holds or the taka resumes its crawl as foreign financing thins
- ◆The next reserves print refreshing the 30 Jun $37.58bn read, 35 days old
- ◆Export momentum after a 0.9% YoY July dip against a $63.4bn FY27 target needing 15% growth
RISK
- ▼The 0.9% YoY export dip signalling the RMG engine stalling into the gas-supply crunch
- ▼Record $4.49bn external debt repayment bidding for the same FX the $1.77bn trade gap consumes
- ▼A second month of sub-$3bn remittance thinning the buffer that funds the peg
DSE Markets
DSEX flat at 5,895.78, capped under 5,900 — breadth firms to 193/149.
DSEX Index
DSEX closed 5,895.78, flat and capped under 5,900 for a second session; breadth firmed to 193/149 on Tk1,258cr turnover.
Ten sessions bracketed by a 5,784 low and 5,900; today sits 4 points below the high, unable to clear it.
Equity desk: rate relief is not lifting the bank-heavy float — the DS30 lagged; own the broad tape, not the index, until 5,900 breaks.
WATCH
- ◆Whether 5,900 turns to support or caps the float a third session
- ◆Turnover follow-through above Tk1,258cr to confirm the broadening breadth
- ◆Bank scrip — the DS30 lagged the broad tape as NPLs stay 32.26% on the Q1 print
RISK
- ▼The gas-driven factory-closure tape repricing RMG and industrial float earnings
- ▼Rate relief with call money at 9.48% failing to lift banks while credit growth prints 4.98%
- ▼A thin-conviction advance fading if turnover slips back toward Tk1,000cr
The index is going nowhere, and the reason is instructive. DSEX closed 5,895.78 — flat, capped under 5,900 for a second session against a line it has not cleared all window. The backdrop just turned supportive: the July rate spike unwound, the 364d bill cut to 9.54% from 10.09% and call money collapsing to 9.48% — the front back at the 9.50% policy anchor inside one auction. Cheaper money should lift a bank-heavy float. It has not, because the relief meets dead demand: private-sector credit growth just printed 4.98%, and the real economy is seizing on gas-driven factory closures and a 0.9% YoY export dip. The tape confirms it — breadth widened to 193/149 and turnover firmed to Tk1,258cr, but the large-cap DS30 slipped; the bid is broad and small, not in the banks. The book stays selective: a rate rally without a credit impulse is a valuation tailwind earnings cannot yet cash.
T-Bonds & T-Bills
Front collapses 46-55bp — 364d back to 9.54%, July's repricing fully unwound.
BD Govt Yield Ladder
The front collapsed — 364d cut to 9.535% from 10.09%, 182d to 9.53%, 91d to 9.30% — while the 10y held 10.24%.
The 364d held 10.09% for six prints after its July jump; this auction cut it 55bp back to 9.535%.
ALCO: the front is back at policy — price term funding to the auction, not July; lock relief before deposit rates catch down.
WATCH
- ◆Whether the front holds near 9.50% or the next auction cuts further below policy
- ◆The 10y at 10.24% — whether duration supply cheapens it toward the 10.34% recent high
- ◆5s10s at 56bp — the slope repricing long-dated fixed-rate books
RISK
- ▼The front collapse signalling weak credit demand — private growth at 4.98% — not just liquidity
- ▼Deposit and lending rates lagging the bill-curve drop, squeezing bank NIMs
- ▼Long-end supply into a thin FY27 auction calendar steepening 5s10s from 56bp
The curve erased July in a single auction. Three weeks ago the front repriced 46-55bp higher on a funding squeeze; this print takes it all back — the 364d cut to 9.535% from 10.09%, the 182d to 9.53%, the 91d to 9.30% — and the front-end inversion that had the 364d trading above the 5y is gone. The bill curve is a clean upward slope again, anchored 3.5bp over the 9.50% policy rate. Two readings compete. The benign one: the 30 July cut is transmitting and interbank liquidity has normalised. The uncomfortable one: yields fell because there is nothing to fund — private credit growth printed 4.98%, and the demand that would bid rates up has evaporated. For ALCO the practical point is timing: term funding can now be priced to the auction, not the July spike — but lock the relief before deposit rates catch down, because the asset side reprices first and NIM leaks in the lag.
Macro & Inflation
Private credit sank to 4.98%; June non-food inflation firmed to 9.61%.
CPI Trend
June point-to-point inflation firmed — non-food to 9.61%, food to 8.6% — while the 12m-avg held 8.6% on the older March print.
The 12m-avg is lowest since Mar 2023 (8.4% then) — a March read; the June point-to-point is firming again.
MPC: with June non-food at 9.61% and the August LPG hike not yet in the base, the next print carries fresh cost-push — hold before easing.
WATCH
- ◆The next CPI print — the first to carry the August LPG hike into the 9.61% June non-food line
- ◆Private credit at 4.98% — whether the fresh print marks a floor or extends the slide from 6.03%
- ◆Import cover 6.48mo on the June read — the 30 Jun reserve build lifted it from 5.86mo
RISK
- ▼June non-food inflation at 9.61% firming as the August LPG hike compounds the next cost-push print
- ▼Private credit at 4.98% with M2 at 10.52% on the Feb read — liquidity present, loan demand absent
- ▼A real policy rate of 0.34% on the June read thinning the taka's carry cushion after the 30 July cut
Remittance
July remittance rose 15.8% YoY to $2.86bn — a second month below $3bn.
Remittance Inflow
WATCH
- ◆Whether $2.86bn is a floor or the top of a slide after a second month below $3bn
- ◆Remittance versus the softening export leg after a 0.9% YoY July export dip
- ◆BB's new PayPal, Payoneer-style rails — a structural add to the inflow channel
RISK
- ▼A second month below $3bn signalling the post-Eid base is softening
- ▼The line's cushion bidding against a record $4.49bn external repayment
- ▼Migration-driven inflows exposed to a slowing Gulf construction cycle
Commodities
Gold rebounded to $4,121; the gas crunch and LPG hike lift energy costs.
WATCH
- ◆Whether gold holds the $4,121 rebound or the safe-haven bid fades again
- ◆Spot LNG against the stale 20 Apr $15/MMBtu print as the gas crunch bites
- ◆The August LPG hike — Tk70 per 12kg bottle — feeding the June 9.61% non-food line
RISK
- ▼The gas-supply shortfall forcing costlier spot LNG imports onto a thinner FX buffer
- ▼Energy cost-push feeding the firming 9.61% June non-food CPI line
- ▼Gold's bid rebuilding if the Gulf premium returns on renewed escalation
Fiscal
NBR frozen at Tk3.61tn; the FY27 gap just cheapened as the 364d fell.
NBR Tax Revenue
Monthly NBR collection printed flat again, holding the YTD line at Tk3.61tn — no new receipt across the fourteen-print window.
Fourteen prints, all Tk3.61tn — the last new monthly figure predates the window.
Treasury: revenue frozen, but the FY27 gap just cheapened — onshore funding clears at a 364d 9.54%, down 55bp.
WATCH
- ◆The next monthly NBR print — the Tk3.61tn line has not moved across the window
- ◆Govt bank borrowing beyond the 30 Jun Tk0.94tn as the FY27 programme funds
- ◆Whether the 364d stays near 9.54% into the FY27 issuance calendar
RISK
- ▼A thin revenue base carrying the FY27 gap as foreign commitments hold a 14-year low
- ▼Gas-driven factory closures denting VAT and income receipts into the next NBR print
- ▼The bill-curve relief reversing if issuance supply outruns the yields dive
Iran War & Oil
Brent holds $90.12 — $10.12 over the $80 line; WTI eased to $81.26.
Brent Crude
Brent held $90.12 while WTI eased to $81.26 — the Brent-WTI spread widened to $8.86.
Brent prints $10.12 above the $80 FY27 line, holding the level it retook last week.
Treasury: the import bill stays $10.12/bbl above the FY27 assumption — watch the subsidy line and energy-importer credit into the gas crunch.
WATCH
- ◆Whether Brent holds above $90 or the Gulf premium rebuilds on renewed escalation
- ◆The FY27 subsidy provision against a spot Brent $10.12 above its $80 assumption
- ◆The August LPG hike feeding energy cost-push into the June 9.61% non-food line
RISK
- ▼Brent above $90 pass-through into a firming 9.61% non-food CPI line
- ▼The crude bill compounding a thinner FX buffer as the taka settles at 123.82
- ▼A gas-supply shortfall forcing costlier spot LNG onto the energy bill as the fuel crisis bites
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